Federal prosecutors in Seattle have filed a civil action to seize $7.1 million in cryptocurrency linked to an alleged oil and gas investment scam that defrauded victims out of nearly $18 million. The Department of Justice plans to distribute any recovered funds to verified victims once the forfeiture is approved.
$97 Million Fraud Scheme Under Investigation
The scheme allegedly ran between June 2022 and July 2024, raising nearly $97 million under false pretenses. Investors were told their funds would go toward purchasing oil tank storage facilities, which would then be rented out for high returns.
Once the victims transferred money, the scammers stopped responding, according to prosecutors.
Authorities say the perpetrators laundered the stolen funds through cryptocurrency exchanges, primarily converting them into Bitcoin (BTC), Tether (USDT), USD Coin (USDC), and Ether (ETH).
International Network With Links to Russia and Nigeria
The U.S. Attorney’s Office revealed that crypto accounts tied to individuals in Russia and Nigeria were used to funnel and conceal funds. A significant portion was later transferred to exchanges in those countries.
“The co-schemers moved their ill-gotten gain through various crypto accounts to try to launder the money,” said Acting U.S. Attorney Teal Luthy Miller.
Indictment and Seizure of Assets
Geoffrey Auyeung, one of the key individuals accused in the case, was indicted in August 2024. He allegedly received the largest share of the fraudulent proceeds and used them to purchase crypto assets, later transferring much of it to Binance.
Authorities also seized $2.3 million from Auyeung’s U.S. bank accounts, adding to the assets being reclaimed.
Potential Recovery for Victims
So far, prosecutors have identified victims defrauded of $17.9 million, and more are expected to come forward. If the court approves the $7.1 million crypto forfeiture, the total amount recovered will rise to $9.4 million, which will be made available for victim restitution.
Ongoing Regulatory Crackdown
This case is part of a broader push by U.S. regulators to crack down on crypto-related fraud. Recent cases include:
- OmegaPro promoters, accused of a $650 million Ponzi scheme
- Shane Donovan Moore, sentenced for defrauding investors out of $900,000
- Hong Kong police arrests tied to a $382,000 scam
The U.S. continues to target crypto fraud with aggressive enforcement actions, aiming to restore investor confidence and return funds to victims.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.